BILL NUMBER: SB 1471	CHAPTERED  09/29/00

	CHAPTER   848
	FILED WITH SECRETARY OF STATE   SEPTEMBER 29, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 28, 2000
	PASSED THE SENATE   AUGUST 31, 2000
	PASSED THE ASSEMBLY   AUGUST 30, 2000
	AMENDED IN ASSEMBLY   AUGUST 28, 2000
	AMENDED IN ASSEMBLY   JUNE 15, 2000
	AMENDED IN SENATE   MAY 16, 2000
	AMENDED IN SENATE   APRIL 27, 2000

INTRODUCED BY   Senator Schiff
   (Coauthors:  Assembly Members Havice, Kuehl, and Washington)

                        FEBRUARY 10, 2000

   An act to add Chapter 3.5 (commencing with Section 3040) to Title
14 of Part 4 of Division 3 of the Civil Code, relating to health care
liens.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1471, Schiff.  Health care liens.
   Existing law provides for the regulation of health care service
plan contracts by the Department of Managed Care and for the
regulation of health insurance policies issued by disability insurers
regulated by the Department of Insurance, as specified.
   This bill would provide that no lien asserted by a licensee of the
Department of Managed Care or the Department of Insurance, and no
lien of a medical group or an independent practice association, to
the extent it asserts or enforces a lien, for the recovery of money
paid or payable to or on behalf of an enrollee or insured for medical
services provided under a health care service plan contract or
disability insurance policy, may exceed specified amounts.  These
provisions would not apply to a lien made against a workers'
compensation claim, against a 3rd party for Medi-Cal benefits, and
for hospital services, as specified.  The bill would declare that it
would not create any lien right that does not currently exist at law
and would not make a lien that arises out of an employee benefit plan
or fund enforceable if preempted by federal law.  The bill would
prohibit its provisions from being admitted into evidence or given in
an instruction in any civil action between an enrollee or insured
and a 3rd party.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Chapter 3.5 (commencing with Section 3040) is added to
Title 14 of Part 4 of Division 3 of the Civil Code, to read:

      CHAPTER 3.5.  HEALTH CARE LIENS

   3040.  (a) No lien asserted by a licensee of the Department of
Managed Care or the Department of Insurance, and no lien of a medical
group or an independent practice association, to the extent that it
asserts or enforces a lien, for the recovery of money paid or payable
to or on behalf of an enrollee or insured for health care services
provided under a health care service plan contract or a disability
insurance policy, when the right of the licensee, medical group, or
independent practice association to assert that lien is granted in a
plan contract subject to the Knox-Keene Health Care Service Plan Act
of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety Code) or a disability insurance policy subject
to the Insurance Code, may exceed the sum of the reasonable costs
actually paid by the licensee, medical group, or independent practice
association to perfect the lien and one of the following:
   (1) For health care services not provided on a capitated basis,
the amount actually paid by the licensee, medical group, or
independent practice association pursuant to that contract or policy
to any treating medical provider.
   (2) For health care services provided on a capitated basis, the
amount equal to 80 percent of the usual and customary charge for the
same services by medical providers that provide health care services
on a noncapitated basis in the geographic region in which the
services were rendered.
   (b) If an enrollee or insured received health care services on a
capitated basis and on a noncapitated basis, and the licensee,
medical group, or independent practice association that provided the
health care services on the capitated basis paid for the health care
services the enrollee received on the noncapitated basis, then a lien
that is subject to subdivision (a) may not exceed the sum of the
reasonable costs actually paid to perfect the lien, and the amounts
determined pursuant to both paragraphs (1) and (2) of subdivision
(a).
   (c) If the enrollee or insured engaged an attorney, then the lien
subject to subdivision (a) may not exceed the lesser of the following
amounts:
   (1) The maximum amount determined pursuant to subdivision (a) or
(b), whichever is applicable.
   (2) One-third of the moneys due to the enrollee or insured under
any final judgment, compromise, or settlement agreement.
   (d) If the enrollee or insured did not engage an attorney, then
the lien subject to subdivision (a) may not exceed the lesser of the
following amounts:
   (1) The maximum amount determined pursuant to subdivision (a) or
(b), whichever is applicable.
   (2) One-half of the moneys due to the enrollee or insured under
any final judgment, compromise, or settlement agreement.
   (e) Where a final judgment includes a special finding by a judge,
jury, or arbitrator, that the enrollee or insured was partially at
fault, the lien subject to subdivision (a) or (b) shall be reduced by
the same comparative fault percentage by which the enrollee or
insured's recovery was reduced.
   (f) A lien subject to subdivision (a) or (b) is subject to pro
rata reduction, commensurate with the enrollee's or insured's
reasonable attorney's fees and costs, in accordance with the common
fund doctrine.
   (g) This section is not applicable to any of the following:
   (1) A lien made against a workers' compensation claim.
   (2) A lien for Medi-Cal benefits pursuant to Article 3.5
(commencing with Section 14124.70) of Chapter 7 of Part 3 of Division
9 of the Welfare and Institutions Code.
   (3) A lien for hospital services pursuant to Chapter 4 (commencing
with Section 3045.1).
   (h) This section does not create any lien right that does not
exist at law, and does not make a lien that arises out of an employee
benefit plan or fund enforceable if preempted by federal law.
   (i) The provisions of this section may not be admitted into
evidence nor given in any instruction in any civil action or
proceeding between an enrollee or insured and a third party.
